Wednesday
Apr232008

Recent Key ETF Performance

Below we highlight the recent performance of key ETFs across a number of asset classes.  The best performers over the last month have been international ETFs and commodity ETFs.  The oil-tracking ETF (USO) is up 18.6% over the last 30 days, while the BRIC emerging market ETF is up 18.55%.  US sector ETF performance is varied.  Energy (XLE), Materials (XLB), Technology (XLK) and Utilities (XLU) are up over the last month, while Consumer Discretionary (XLY) and Financials (XLF) are down.  Fixed income ETFs have all been seeing declines recently as bond yields rise.

Etfperf423

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Wednesday
Apr232008

Analyzing China's Declines

China's Shanghai Composite is down 37.5% year to date, however, the average stock in the index is down 32.44%.  As a market-cap weighted index, this means that the largest stocks are the ones dragging the index down.  We broke the 888 stocks in the index into deciles based on market cap at the start of the year and calculated the average year to date performance of stocks in each decile.  As shown in the chart below, the decile of the largest stocks are down an average of 37.88%, while the rest are all down between 28% and 34%.  We also provide a table of the 25 largest stocks in the index along with their year to date performance and their market caps at the start of the year.  PTR was more than double the size of the 2nd largest stock, and it is down 46% in 2008.  Luckily in the US, the largest stock (XOM) is down just 16 bps on the year.

Shangcomp423

Shangcomposite42308

   

Wednesday
Apr232008

Bill Miller First Quarter Letter

Bill Miller's quarterly letter to shareholders was released earlier this afternoon, and even though his performance has lagged over recent quarters, his letter is still considered required reading for investors.  While a full copy of the letter can be found on Yahoo, some of the highlights include:

"We have had 3 worse quarters in absolute terms: the quarter the market crashed in 1987, the 9/11 quarter, and the third quarter of 1990."

"I think we will do better from here on, and that by far the worst is behind us."

"Most housing stocks are up double digits this year despite dismal headlines, a sign the market had already priced in the current malaise. I think likewise we have seen the bottom in financials and consumer stocks, but not necessarily the bottom in headlines about the woes in those sectors. Although the economy is likely to struggle as it did in the early 1990s, the market can move higher, as it did back then."

"I agree with George Soros that commodities are in a bubble, but it also appears he is right when he describes it as one that is still inflating, and we still have the summer driving and hurricane season with which to contend."

"The Fed could help a lot by halting its interest rate cuts."

"Yet valuations in general are not demanding, interest rates are low, and corporate balance sheets, especially in the U.S., are in excellent shape. That sets the stage for what should be an improving environment for investors in stocks and in spread credit products, if not in government bonds where risks are high and opportunities low, in my opinion."

Wednesday
Apr232008

List of Chinese ADRs

Last year we posted this list of Chinese ADRs along with their performance for the year.  As Chinese equities rallied, these ADRs rose significantly.  The story is quite different this year, however, as China's Shanghai Composite has fallen nearly 50% from its highs in late 2007.  The best performer in the list last year (China Eastern Airlines) is down the most this year.  CEA rose 348% in 2007, but this year it has already given up more than half of its value.  As shown, 55 of the 60 Chinese ADRs that we track are down in 2008.  CEO, LONG, JASO, NTES and CHL are the only ones up on the year.

Chinaadrs

Wednesday
Apr232008

Looking For Action? S&P 1500 Most Volatile Stocks

For traders with a more short-term time horizon, we have compiled our monthly list of the S&P 1500 stocks that have the largest intraday high/low ranges (based on the average percent spread between the intraday high and low for the last fifty days).  We then grouped the stocks based on whether their fifty-day moving average is rising or falling.  Tickers highlighted in gray are new to the list since last month's screen.

As this month's list illustrates, even after the rebound we have seen in the equity markets, the overriding majority of the most volatile stocks are in downtrends.  Of the fifty stocks highlighted, only seven have rising 50-day moving averages.  Even more surprising to some is that of those seven names, four of them are homebuilders!  Who would have thought that at the beginning of the year?

Finally, as you can see from this month's list, most of the stocks highlighted below are trading under $10 per share.  So while they may have large percentage swings intraday, in terms of price, the move may only be a few cents.  To help address this issue, in the bottom table we have included a list of the S&P 1500's most volatile stocks with a price of more than $20 per share.

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Most_volatile_stocks_april

Most_volatile_stocks_above_20_apr_2

Wednesday
Apr232008

Top Rated StockScouter Stocks

There are numerous free investing sites out there that provide their own ratings for stocks.  One of the more widely known is MSN's StockScouter service.  The ratings are based on a 1 (worst) to 10 (best) scale "using a system of advanced mathematics to determine a stock's expected risk and return."  We screened the S&P 500 for StockScouter's top rated stocks, and 38 of the 500 stocks in the index received a "10" rating.  Below is the list of these 38 stocks sorted by year-to-date percent change.  CHK, HAL, NSC and BNI are the best performers in the list, while AAPL, AGN, INTC and ADBE are the worst performers.  We never recommend using any of these lists as blanket buy signals.  Instead, they can be used as a supplement to an investor's own analysis or a starting point for further analysis.  We'll check back on the performance of these names in a couple of months to see how StockScouter's top rated stocks have performed.

Msnstockscouter

Wednesday
Apr232008

Oil and Natural Gas Due For A Pullback?

Oil and natural gas have both moved into extreme overbought territory (more than 2 standard deviations above their 50-day moving averages) in the past couple of days.  While the long-term uptrends are still in place, a short-term pullback is expected. 

Oilnatg_2

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Tuesday
Apr222008

Energy ETFs Soar Into Overbought Territory

Below we highlight our trading range charts of four ETFs that track oil and gas stocks.  The red area represents between one and two standard deviations above the ETF's 50-day moving average.  When the price moves above the red zone, extreme overbought levels are reached, and the risk/reward trade-off shifts to the risk side.  As shown in the charts below, the prices of these ETFs have turned parabolic in recent days as oil has shot to $120/barrel.  For those that own and have gains in these ETFs, it would be greedy to not take some profits here.

For our daily analysis of more than 200 ETFs, subscribe to Bespoke Premium today.

Energycharts

Tuesday
Apr222008

Netflix (NFLX): Live By The Writers' Strike, Die By The Writers' Strike

Netflix (NFLX) had its largest decline (-23.70%) in more than three years today after reporting inline expectations and lowering guidance for the rest of the year.  One reason for the loss of earnings momentum going forward may be related to the Hollywood writers' strike that began in November 2007 and ended in February.  While the period that different shows went on hiatus varied (using NBC's "The Office" as a benchmark), most shows started airing reruns in mid-November and didn't begin running new episodes until early April.  Overlaying those dates on the chart of NFLX shows that from the time that reruns began airing to the time that new episodes came back on the air, NFLX enjoyed a run of 52%.  While it could just be a coincidence, the fact that one of NFLX's key competitors -- original programming -- temporarily went off line had to have had at least some positive impact on the stock's performance.

Nflx_2

Tuesday
Apr222008

Two Down Days to Start the Week

After a nice rally on Friday, the markets have pulled back on the first two trading days of this week.  We broke the Russell 1,000 stocks into deciles (10 deciles of 100 stocks) based on performance from the 3/10 bottom through the close on Friday to see if this week's declines have been led by pullbacks from the winners or bigger declines from the losers.  The chart below highlighting the performance of each decile clearly shows that the winners during the rally have held up best this week, while the losers have continued lower.

Decile423

Below we highlight the 25 worst performing stocks in the Russell 1,000 so far this week.  As shown, the airlines have gotten killed as poor earnings and sky-rocketing oil have punished shares.

Worst423 

Tuesday
Apr222008

CME Down Over 10%

Shares of Chicago Mercantile Exchange (CME) are currently trading down more than 11%, which would make today's decline the second largest in the stock's history.  Below we highlight the three times CME has had a one-day percent decline of more than 10%.  Looking at the bright side, on each of the two prior days, the stock traded higher the following day and week.

Cme_2 

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Tuesday
Apr222008

Crisis Indicators Continue to Cool

On March 27th, we posted charts of three "credit crisis" indicators highlighting that the pain was beginning to subside.  We have updated these charts after about a month has passed, and they continue to show signs of relief.

The first chart below is an index that measures credit default risk for 125 investment grade companies.  After peaking on March 10th, the default risk index has fallen 45% back to levels seen at the start of the year. 

The second chart is an ETF that tracks the S&P National Muni Bond Index (MUB).  When the auction rate securities market froze up in late February, municipal bonds cratered as tax-free yields rose above those of many taxable bonds.  Since then, however, muni bonds have risen and stabilized as yield-hungry investors flocked to them. 

The last chart is Bankrate's national average for 30-year fixed mortgage rates.  When all is said and done, things won't get better until homes start selling again, whatever the prices might be.  For buyers to buy, rates need to be attractive, and the Fed has tried their hardest to lower borrowing costs by dropping the Fed Funds Rate.  Unfortunately, even as the Fed was cutting, mortgage rates actually in February and early March as banks shied away from risk.  By the end of March, mortgage rates finally dropped from the low 6s to the mid-5s.  Over the last week, however, rates have spiked as bonds in general have sold off.

Cdx423

Mub423

30yearfixed423   

Tuesday
Apr222008

Existing Home Sales Charts

Existinghome422Existing Home Sales came in at 4.93 million for the month of March -- the third worst reading in the economic indicator's history.  The indicator fell 1.99% month over month, less worse than the expected -2.2%.  The indicator fell 19.31% year over year versus expectations of -19.48%.  As shown in the table at right and chart below, the year-over-year changes are getting slightly less worse than they have been in recent months, but they still have a long way to go before a mention of "things are getting better" should surface.  However, things have gotten better for homebuilding stocks.

Later this week, New Home Sales for March will be released, and next Tuesday we'll get the updated S&P/Case-Shiller numbers.

Existinghome4222

Existinghome4221

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Tuesday
Apr222008

China's Worst Bear Market

From its peak on October 16th to its low last Friday, China's Shanghai Composite was down 49.2%.  This decline is the worst bear market for Chinese equities since at least 1995 (the index began in 1990, but we only have price data back to 1995).  As shown in the table of bull and bear markets below, the average Shanghai bear sees a decline of 32.91% and lasts 166 calendar days.  The bull market that preceded the current bear was also the biggest rally for the index since 1995 (+502%).  The more they go up, the harder they fall.  And just in time for the Olympics.

Chinabear

Chinabullbear 

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Monday
Apr212008

Earnings Beat Rates and Key Reports

Slightly more than 200 US companies have reported earnings since Alcoa (AA) kicked things off on April 7th.  As shown below, 57% of these companies have beaten analyst estimates.  After a weak showing last quarter, the "beat" rate is currently even lower this quarter.  But things still haven't gotten as bad as they did in late '98 and '01, and based on the performance of stocks since earnings season began, investors seem to like the 57% beat rate.

Epsbeatrates

Below we highlight key companies reporting earnings for the rest of the week.  For each stock, we include a portion of the data from our earnings calendar available to Bespoke Premium subscribers.  Along with current EPS estimates and its change over the last month, we also include the EPS "beat" rate for each stock based on quarterly reports since 2001, along with the average 1-day price change in reaction to earnings reports.

Keyreports

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